By Lucy Craymer
WELLINGTON--Air New Zealand Ltd. (AIR.NZ) has increased its
shareholding in Virgin Australia (VAH.AU) to the maximum allowed by
the Foreign Investment Board.
A security notice released to the New Zealand stock exchange
Tuesday showed that Air New Zealand had increased its stake in the
company to 25.99% from 24.46%. The company had won approval from
Australia's Foreign Investment Review Board to increase its holding
to this level in October 2013.
Virgin Australia is currently battling to win market share from
Australian flag carrier Qantas Airways Ltd. (QAN.AU) while facing
high jet fuel costs and fragile consumer confidence. The company
recorded a first-half loss in the six months through December.
Virgin Australia, a former discount carrier, has put
business-class seats on flights and added service to small towns in
the western part of Australia, where people fly to work at remote
mines. Qantas has responded by adding capacity, leading to a glut
of seats and forcing both airlines to discount prices.
Singapore Airlines Ltd. (C6L.AU), Etihad Airways and Richard
Branson's Virgin Group also hold stakes in the Australian based
airline.
Write to Lucy Craymer at lucy.craymer@wsj.com, @lucy_craymer
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